Social Responsibility and a New World Order

By David Weiss, president and CEO of CHF International. Founded in 1952, the organization runs economic development projects worldwide to construct affordable housing. Weiss took on his current role as President and CEO of CHF International in October 2010, having previously served on CHF International’s board of trustees including as Chairman of the Board.

Just before the New Year, the London-based Center for Economics and Business Research announced that Brazil had overtaken the United Kingdom as the world’s sixth largest economy. Furthermore, it predicted that by 2020, India and Russia will also have overtaken all the European economic powers.

There’s no question that the BRIC countries – Brazil, Russia, India and China – are indelibly changing the G8.

All of these newcomers give aid to developing countries even though some still receive substantial international aid themselves from the U.S. and other multilateral and bilateral donors. This apparent schizophrenia is the symbol of the emerging new world order — a world of multi-polar powers, where half of the G8 still have significant poverty within their borders.

Where will non-governmental organizations (NGOs) fit into this changing world?

From the vantage point of CHF, the discovery process starts with funding. NGOs receive funds from a variety of donors, including the public, governments, multilateral institutions, foundations and corporations. The focus, of late, has increasingly been on corporations as a source for development funds. USAID, for example, is increasingly emphasizing private sector engagement in the programs they fund. Meanwhile, the U.S. State Department has led a series of initiatives, including Partners for a New Beginning (PNB) — a public-private partnership in coordination with the Aspen Institute, which includes multinationals such as Coca Cola and local companies in the Middle East such as Souktel. At CHF International, we’ve seen this approach succeed on many levels— through our relief works in partnership with local companies in Haiti, and our microfinance work in partnership with Arab banks in the Middle East.

The management consulting services company, Accenture, recently released a report on a new type of convergence — an emerging relationship between NGOs and corporations. The report’s authors argue that it’s no longer enough for a company’s corporate social responsibility (CSR) arm to fund programs based on perceived publicity value. Corporations are looking to partner with NGOs who understand their business in a partnership that meets both community and commercial needs. CSR is becoming an integral part of corporate strategy.

These findings and new developments mean that the future for NGOs depends on their ability to work side by side with the private sector. And multinational corporations are beginning to see this model as the way forward.

Once-emerging markets are now growth markets. Haitians, Brazilians, Indians – these populations are now consumers and stakeholders, not just beneficiaries of charity relegated to the back of annual reports. And their countries are becoming new, core markets that large corporations cannot ignore. Corporations have to be more and more focused on instituting higher labor standards. After all, local employees working in what were once sweatshops are now becoming consumers of the products their factories make.

We should celebrate these emerging economies, some of which are beginning to outpace our own. This more equitable world, in many ways, is what we have been working towards. We should also be seeking the opportunity to work with corporations to ensure that their work has a positive impact on local communities and that they are making social as well as financial investments.

But we should also be careful, making sure that, in this new world, NGOs do not suffer mission-creep or become agents of exploitation. Each situation must be judged on its merits, according to the mission and values of the NGO and the work of the corporation. Commercial needs can only be met if they genuinely service the community and lead towards greater equity, and economic empowerment.

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